Horse racing is Bill Murray. It's groundhog day. It's its method of operation.
Anyhow here is my new post, with a few strike outs. Easiest post I've ever written.
Like we've seen over the past several years, the decrease in racedays causes handle to fall. A decrease in field size causes handle to fall. The other main driver of handle - the price, or takeout - has generally been falling, because rebating has not been a bad word like it was early in the decade.
What will happen in
The last metric - takeout - is probably going to be a big determinant the next year or two**, and right now, this does not look pretty for customers who bet.
Lower takeout through modestly rebated handle is becoming extinct for the mid sized and smaller horseplayer. In New York and Pennsylvania***, many rebated players are being shuffled into high takeout regimes, and signal fees are being increased. Right now as I type, some tracks are withholding selling their signals to smaller ADW's who rebate, with the hope that players don't care about price and will continue to play in their systems. They won't. This will not happen.
As Mike Maloney noted in this interview: "All we’re doing when we raise takeout is driving away people. The regulars are coming less often or they’re coming just as often but getting ground down. People within the game still don’t understand how destructive takeout is." I think that's true and I we'll see this hurt handles in 2014.
So to sum up: If field size continues to fall, if racedays continue to fall, and if takeout is hiked as we've seen happen the last month, (along with making it harder and harder for players to conveniently bet the game by stifling choice via resellers, via higher signal fees****), it doesn't take a rocket scientist to predict handles will be lower in
* - The post was written before Keeneland went to dirt, and field size fell appreciably, as did handles.
** - The post was written well before the Chuchill takeout hike in April, where they suffered double digit decreases in handle.
*** - Many of these new rules are being instituted for the first time January 1st of this year.
**** - Signal fees have been under severe pressure for horseplayers and this has gotten worse with the conglomerates like Monarch, CDI/Troutnet/Tracknet etc. The environment for everyday customers started to get very bad in the summer of 14, and has gotten worse since then.